The Reva: Why Americans May Never See the Best New Car on the Road

The capillaries of India's cities are clogged with every imaginable form of cacophonous conveyance: hulking buses, braying bullock carts and motorbikes stacked with families of five all jostle for space on the roads.

The result is that most of India's commuters idle angrily in traffic for hours every day. The government is trying to play catch-up with a long string of mass transit projects, but most residents pine for the status, peace and luxury of a car all their own.

After almost a year of delays, the Indian automobile manufacturer Tata is finally set to answer that call by releasing the world's cheapest car next month. Priced at about $2,000, the Tata Nano is a five-seat, air-conditioned, gasoline-powered car. It is also a nightmare for environmentalists, who predict sky-high sales will further pollute India's already smog-filled air.

So why isn't India's other indigenous automotive invention taking the world by storm? The Reva is the world's most successful electric vehicle. Manufactured on the outskirts of the south Indian city of Bangalore, it is as popular there as it is on the streets of London. Cumulatively it has been driven a combined 55 million kilometers in 20 major cities around the world.

But despite patented technologies, government subsidies, a groundswell of interest in electric vehicles and innovative marketing practices, the Reva is unlikely to dent the global automobile market with as much force as the Nano.

That's because the environmentally friendly, near-silent plug-in Reva costs three times the Nano and holds only a limited appeal to cash- and credit-strapped first-time car buyers.

"It is very much a second car in the household," says Chetan Maini, the company's chief technology officer and deputy chairman, who has been tinkering with cars since he was a kid and once raced a solar-powered vehicle across Australia, finishing third.

Maini points out that five years ago, 22 percent of cars sold in India were a family's second vehicle; today that number is nearly 40 percent. "The highest growth is in [the] second car buyer [market]."

Maini received a master's degree in mechanical engineering at Stanford in the early 1990s, focusing on hybrid cars at a time when the field was relatively uncrowded. He relocated to Bangalore in 1999, when California's electric-car regulations fizzled out, launching the first vehicle in India in 2001 and exporting to Europe three years later.

Today, the company retains a strong Bay Area connection, with a key supplier of electronic components and a key venture capital backer (one of three in the U.S.) based there. The company also holds about 10 U.S. patents for the car's energy-management system.

"It was a collaborative effort," says Chetan. "We had suppliers based in California and India."

If the Reva were legal in the U.S., it would be significantly cheaper than the price analysts are expecting for the Volt -- the most anticipated electric vehicle in America -- when it hits showrooms in November 2010. Analysts estimate the Volt will be priced at around $40,000, but after federal and state subsidies and tax write-offs, the price could be closer to $30,000.

That might bring it into the range of affordability for many middle-class Americans, but it is still the price of 15 Tata Nanos.

The reason the Reva is not available yet in the U.S. is the same many European cars do not appear on America's roads: strict safety and testing regulations make the cost of entering the U.S. market prohibitively expensive.

"Our next-gen products might be able to fit that bill," says Maini, who says the company plans to introduce one new model every year.

In the United States, vehicles like golf carts and other small electric cars commonly found on college and corporate campuses and retirement communities are not subject to the same safety standards as conventional cars. These smaller, electric vehicles usually have a top speed of 25 mph and are barred from driving on roads where speed limits exceed 35 mph. By comparison, the Reva has a top speed approaching 65 mph.